Initial Situation

A Swiss start-up with about 150 employees is developing its first generation of helicopters, has already completed 2 prototypes and wants to homologate this first model so that the first helicopters can be manufactured and sold. The company already has orders for a production period of 2 years.

The founder is fundamentally familiar with Aerospace Compliance. Therefore, he has organized the company accordingly and mapped both the development and manufacturing processes in a PLM system.

During the homologation process based on the second prototype, the company discovers that the setup and processes in the PLM system do not comply with the specifications of the main aviation regulatory authorities FAA and EASA. Successful homologation requires the configuration of a compliant PLM system and a repeat development and manufacturing process using a third prototype within this new environment. As a result, the company is no longer financed.

Question

• How does the company manage to adapt the existing PLM environment to the aerospace compliance requirements within the shortest possible time so that the third prototype can be developed and manufactured in this environment as quickly as possible?
• How can this correction be implemented in the most cost-efficient way, given the investor’s limited willingness to invest after investing nearly $400 million?
• How can the knowledge gap about the requirements of the main aviation regulatory authorities FAA and EASA be closed, although no corresponding resources are available on the market?

Solution

The company spontaneously decided on a PLM consulting company and, after a short briefing phase on the inventory situation, had a solution concept drawn up.

The solution concept prioritizes the tight short-term budget situation and the tightly limited implementation timeframe. Aspects such as permanent costs and the subsequent expansion of the PLM environment for process optimization are given lower priority for the time being.

This consideration reveals that the manual adaptation of the existing PLM environment to the homologation specifications takes too long and the budget required for this is hardly feasible. In addition, the necessary aerospace compliance knowledge for the company is not available in the market because it is a very limited resource tied up with a few aircraft and software manufacturers. Neither the budget nor the size of the company allows for the recruitment of an appropriate resource.

The most economical solution involves the depreciation of the existing PLM environment, including the implementation services already included and the majority of the licenses that cannot meet the homologation requirement. Instead, the use of a predefined PLM configuration for the aviation industry is proposed, which already includes necessary processes. Although this solution is no longer completely up-to-date and also entails significantly higher licensing costs, there is no alternative due to the lack of an aerospace compliance knowledge base and equally lacking external consulting options. In addition, differences between the available compliance coverage and the current status can be maintained in the system. Despite this post-maintenance, the implementation effort remains at a small fraction of a completely manual implementation and thus meets the requirement for a very limited implementation budget.

Due to the damaged relationship between the company and the existing PLM implementation partner, the solution is for the PLM consulting company to interpose itself between the disputing parties as a solution partner and mediator, thus minimizing direct communication between the disputing parties.

Implementation

In the first step after the commissioning, the inventory situation at the company’s site was determined. This included contact with the previous PLM implementation partner and looking at their view of the situation. The second step looks at the descriptions of the homologation abandonment and the deficiencies identified in the process. However, these descriptions were not complete, but only an approach of what could still be implemented. Details of the requirements can be found in comprehensive FAA and EASA certification manuals. A true fit-gap analysis was not achievable with this basis, or was too time-consuming and costly.

For this reason, there was no alternative to depreciation of the existing investment and a preconfigured industry solution had to be adapted to the current requirements. To achieve this goal as cost-effectively as possible for the company, it was necessary for the previous PLM implementation partner to convert a large part of the existing licenses into the required licenses. Another goal was to get the previous PLM implementation partner to convert the licenses without one-time costs due to the tricky situation. This was particularly tricky because the preconfigured licenses would have cost 2.5 times as much.

At this stage of the effort, the company filed for bankruptcy considering the implementation, licensing and homologation costs for another prototype, the time required to do so, and the investor’s refusal to provide additional financing. The liquidator re-staffed the company’s management with experienced professionals from a leading helicopter manufacturer and initiated the sale of the company to a leading helicopter manufacturer, whose PLM system and aerospace compliance expertise could subsequently be used for homologation. Homologation is planned for 2023/24.

Project Method

As a pure consulting project without implementation of a solution, no specific project methodology was used.

Challenge

The relationship between the company and its PLM system supplier was deeply troubled. The communication necessary for a solution had to be re-established first, so that a minimum level of readiness for a solution could be established from both sides. In the run-up to homologation, the company had stopped necessary implementation steps for cost reasons, because they went far beyond the estimated budget. In addition, it became apparent that the PLM partner did not have sufficient aerospace compliance expertise to successfully complete the implementation. Rather, it was that the existing implementation did not provide a foundation for successful compliance.

The lack of project and thus corporate financing has delayed the implementation of the solution in the long-term.

Project Information

Project Duration: 2 weeks

Project Team: 1 PLM Consultant (part-time) and 1 Solution Architect (part-time)

Project Budget: 5,000 € consulting service, 0 € implementation service, 0€ licenses and infrastructure

Conclusion

This project is a cautionary tale of what can happen to an underbudgeted project and subsequently to a company. What is the point if the customer and supplier are so far removed from reality in negotiations that the realistic costs throw the planning so far over the edge that the company breaks? What’s the point of cutting costs to the point where professional staff can’t be assigned and the result is nothing but junk? This nasty game is primarily driven by overzealous and unsustainable purchasing departments and played by suppliers in competition. Always to the damage of the purchasing companies. Suppliers systematically demand after delivery of partial results and try to get the best for themselves. This form of “partnership” certainly gives no one pleasure and destroys the company’s reputation on all sides.

From the very beginning, the customer’s project lacked the project foundation in the form of coherent financing and related competent service partners. If a realistic approach had been taken, the budget would either have been set higher or the project’s lack of financial viability would have been clear before the financing rounds. At least between the company and the PLM system supplier there has never been a trusting and respectful partnership. One investor lost nearly $400 million. A company founder with big dreams is equally ruined and had to face criminal proceedings. The supplier has lost its customer and with it annual recurring revenue and new business opportunities. Customers of the company are still waiting in vain for their goods. This would not have been necessary if they had dealt with each other decently and realistically.

My Employer

Vendor-independent PLM consulting company

My Role

I accompanied the project as a PLM consultant and took over the inventory as well as the communication on and between the customer and supplier side. In collaboration with a solution architect, I created and presented the solution concept.